Insolvency and Restructuring partner Jeff Friedman co-authored this article on the intersection of the safe harbors provisions in the Bankruptcy Code for the unwinding of financial contracts and recent decisions of bankruptcy courts holding that the safe harbors do not provide an exception to the mutuality requirement for setoff under Section 553(a) of the Bankruptcy Code, which prohibits contractual triangular setoff. He surveys the leading New York and Delaware bankruptcy case law and suggests workarounds to establish the requisite mutuality and concludes that it should be possible to achieve the same economic result as triangular setoff while not running afoul of Section 553(a).